3 tricks to help you avoid overspending this holiday season


When you're shopping this holiday season, it can be tempting to splurge on gifts, or even throw a few items in the cart for yourself. But if you don't want to start the new year by paying off this year's holiday gifts, think twice about your purchases. Americans racked up more than $1,000 in holiday debt each, on average, at the end of 2018, according to MagnifyMoney's annual post-holiday debt survey. On top of that, 28% of shoppers went into the holiday season still paying off debt from 2017.

Curbing your spending isn't easy. Buying can trigger the release of chemicals in your brain that make you feel good, Ed Coambs, licensed marriage and family therapist at Carolinas Couples Counseling in Matthews, North Carolina, told Grow earlier this year. But there are simple mental tricks you can use to avoid overspending.

Here are a few hacks to help you make smarter spending choices.

Take your time

During the holiday season, there's a sense of urgency to purchase items that are on sale, or to lock in the perfect gift for a special friend or family member.

But don't confuse snapping up a deal with acting on impulse. The average U.S. consumer spends $5,400 each year on impulse buys, in part because of the feel-good chemicals that are released when you make a purchase.

The workaround? Sleep on it.

Instead of making a buy immediately, make a note of the item you want to purchase, and then leave the store or keep it in your online shopping cart with a plan to return in 72 hours if the item is really worth your while. Taking this extra time will eliminate the high that comes along with spending money and help you make clearer decisions about your purchases.

Read more: A simple mental trick you can use to save money during the holidays

Make holiday purchases in cash

Paying with plastic makes spending simpler and more automatic. When spending becomes less conscious, though, you can end up accruing debt.

To avoid the temptation of seasonal promotions from your favorite retailers, try using cash this holiday season. The physical exchange of handing over your hard-earned money for an item at the store feels more "painful," experts say, so you're more likely to think twice about doing it.

If you receive your salary as a direct deposit, withdraw your earnings and divvy up the cash into spending categories that cover all of your fixed and variable expenses such as rent, utilities, groceries, entertainment, holiday gifts, and more.

Once you've spent the designated amount within each category, you're done spending in that category until the next pay period. Carrying a set amount of cash means you're less likely to talk yourself into spending a few more dollars in any given category because that extra money won't be readily available.

Read more: How going cash-only helped this 23-year-old pay off $20,000 in debt in one year

How the pain of paying can affect your spending

Carry larger bills

If you've ever carried a $50 or $100 bill in your wallet and thought twice about breaking it, you're not alone.

"We tend to think twice before breaking bigger bills because we see them as 'special money,'" Dr. Mary Gresham, an Atlanta-based psychologist, told Grow earlier this year. "We treat money differently depending on how we categorize it. We associate a lot of small bills with miscellaneous, petty cash, while we associate large bills with 'special money.'"

Instead of withdrawing cash in $10 or $20 bills, try withdrawing larger denominations. Most small businesses don't keep enough money in the register to break big bills, so carrying them will help you make the extra effort before spending, and be more deliberate when making a purchase.

If you're shopping somewhere that doesn't accept cash, or you're making a purchase online, Dr. Gresham suggests taking a $50 or $100 bill and wrapping it around your credit card so that every time you consider making a purchase, you'll think about how that purchase translates into physical money.

Read more: Why keeping a $100 bill in your wallet can curb spending

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